In separate statements, the companies said they were unable to agree on "final terms and conditions" of the proposed deal. As a result, according to GE's statement, the companies "agreed it was in the best interests of both companies to mutually terminate their agreement and discussions."

The acquisition would have marked GE's entry into what is known as "in vitro" diagnostics, or laboratory testing, while Abbott would have shed a unit growing more slowly than other parts of its business. In vitro" diagnostics generally test blood or urine for diseases from cancer to HIV. Germany's Siemens AG, a GE rival in medical equipment, entered the market last year by paying $5.3 billion for Bayer AG's diagnostic unit.

The Abbott unit had sales of roughly $2.5 billion last year. GE would also have acquired Abbott's smaller point-of-care diagnostic group, which makes testing tools used at the bedside in hospitals, among other diagnostic tools.